Most Americans overpay for car insurance because they don't understand how much they should be paying or they fail to make the effort to shop around to ensure that they get the very best rates possible. This could mean hundreds of dollars that are needlessly going to insurance companies and out of your bank account. In times when our economy is struggling, the housing market is down and gas prices are up, saving any amount of money can be a big deal. Below, we will discuss ways in which you can be assured that you are getting the very best deals on car insurance.

Get Only What You Need: Some people are simply over-insured and are paying much more then they need to be. If you car is paid off you may only need to purchase liability insurance. However, this will be dependent upon what level of risk that you are willing to accept.

Compare, Compare, Compare: Shopping around will help you get the best rate possible. The insurance industry is incredibly competitive and they often try to undercut each other. If you get a great quote, tell your current insurer about it and see if they can either match it or beat it.

Keep Your Insurance Company Updated: Let your insurance company know about any changes in your life that might affect your insurance. For example, if your teen is going off to college and won't be using your car anymore, you should be eligible for cheaper rates.

Increase Your Deductible: Increasing your deductible will decrease the amount of your premiums. Of course, if you get in a wreck, you will have to pay more money upfront if you need to get your car fixed. But if you can afford it, this is a good way to lower your insurance costs.

Combine Home and Car Policies: Combining your home and car policies is a good way to qualify for a cheaper rate. It is also easier to only work with one company to insure everything.

Car insurance can be very costly. However, there are ways that you can lower your costs. They include comparing prices of various insurance companies, keeping your insurance company abreast of any changes which may decrease the amount of money that you must pay for premiums, increasing your deductible, combining your home and auto insurance and getting only the level of insurance that you need. There is such a thing as being over-insured and it will cost you money.

However, it is important to note, that before you make any major changes, make sure that the savings are worth it. It would do you little good to increase your deductible if you save only $50 a year. This would not help you if you got an accident. However, if your savings are substantial, then go for it. Remember, that the insurance industry is competitive and you are likely to find better rates if you take the time to shop around. At worse, you don't save much money. However, in a best case scenario, you could save hundreds of dollars.